Key Steps to Fix your Credit Score Fast

Key Steps to Fix your Credit Score Fast

The credit score is something that dictates your all-around financial performance. Plus, it is examined to check your eligibility for the credit cards and mortgage applications. According to FICO, around 20% of the Americans were found to be with a bad credit score. If you are one of them and you look out for the ways on how to fix your credit score fast.

Dispute the errors in the credit report

The foremost thing is to request a free credit report from the certified bureaus are TransUnion, Equifax, and Experian. Every year, a free report is entitled to every individual as per the law. Upon receiving, examine the record by finding basic human errors, unpaid bills, and late payments, etc.

Clear down the outstanding balances

Around 30% of your credit score is calculated on the amount you owe to the creditors and money lenders. However, that’s a simple comparison of how much owe and how much total credit. So, pay down the credit balance, and opt for minimal usage, and follow the credit utilization factor to fix your credit score fast.

Here’s an example to give you a clear idea of this factor.

Let’s say a person’s credit limit is $20,000, and the usage is $10,000 in a month. So, user credit utilization is 50 percent. In case the user uses the aggregate limit i.e., $20,000, then the ratio turns out to be 100 percent. What experts suggest on this is to use 30 percent ($6,000) of the entire credit limit.

And if you owe more than the suggested amount, paying the balances can be quite tricky for you. Try to live a lean lifestyle for a few months, or go for a second job to bring the dues at a lower level.

Get your credit limit increased

Well, not every user is in a position to pay the balances quickly. But you can take a different approach to sort this out and have a better credit utilization rate. All you have to do is to call your creditor and ask them if the specific limit can be raised.

For example, the current usage limit is $2,000, and you get a chance to get it raised to @4,000. At this point, the user naturally achieves a half utilization rate. Doing this will defeat the purpose of obtaining an increased limit, only then if you charge the card up to $4,000.

Open a new credit account

If an existing creditor doesn’t help you with increasing the credit limit. Then it is suggested to apply for a card with a different user. Because it will also help to fix the credit score as the utilization ratio will be based on both the accounts.

Let’s say if a user with a limit of $10,000 owes $5,000 will gain a 50 percent utilization rate. And that too regardless of whether that half ratio is one card or distributed on multiple credit cards.

But beware, because handling multiple accounts is not easy either. Too many accounts may develop some risk of being a spendthrift at a particular stage. So, don’t let your credit score dinge. Apply for a maximum of two cards to try out this method.

Work out on the negative balances

Your long bills acting as debt can bring your credit score down. And at this stage, you won’t be able to manage it yourself. So, it is advisable to hire a credit repair agency as an expert can help you in settling everything.

So, there’s no precise time like present, especially when it comes to knowing “how to raise your credit score.” To be in a better financial situation, you need to put some efforts from your end. And rest assured will be when you hire professionals to help you with fixing your credit score. Once everything settles evenly, you will notice how much it has improved your future ventures.

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